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Year after year, significant time and money gets invested in golf’s grow-the-game effort. Meanwhile, along come new twists on the sport and new waves of people interested in paying for access to the links. The “traditional” golf sector can’t claim it invented FootGolf, FlingGolf or even speedgolf, but so be it. What matters is the revenue and new customers these variations increasingly offer.

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April 2018

Shane Gardner Brings Conservatism Back to Multi-Course Management

By Steve Eubanks

If you remember someone who lived through the Great Depression, you have a story about their quirks. There was the grandmother who saved aluminum foil for months; the uncle who never turned on the heat or air no matter how cold or hot it got; the elderly neighbor who died with way too much cash in odd places throughout his home; or the guy who cut the ignition on his truck and coasted down every hill to save fuel. We shook our heads at them then and marvel now at how the Depression affected them for life.

On a smaller scale, every operator who made it out of the Great Recession of 2008 bears emotional scars. And like the men of women who lived through the 1930s and ‘40s, those still standing in our business will do things differently from now on.

Shane Gardner, founder of Orion Management Solutions in Leawood, Kansas (a suburb of Kansas City), is one such operator. A middle-class Midwesterner who grew up in Omaha, Nebraska, Gardner took a job at his local golf course at age 13. Once he reached adulthood the owners of that course helped Gardner find a job of his own in Bellevue, a suburb of Omaha. From there he joined the management company that would eventually become Arcis Golf. He managed multiple courses in Nebraska and, eventually, the Southeast.

It was in a northern suburb of Atlanta, during the heady years of golf development, that a little voice in Gardner’s head yelled that something wasn’t right.

“I was in my early 30s, and the homes (on that golf course) were selling for $500,000 to a million,” he said. “There were people in those homes who were my age. I asked myself, ‘What did I do wrong?’ My parents had always taught me to put 20 percent down and buy a house I could afford, one where if something happened, you would never get upside down. They were conservative people. But I was seeing couples buy these (large and expensive) homes that I couldn’t think about buying.”

As Gardner dug deeper, he realized that he hadn’t done anything wrong. The debt on those homes was unsustainable. Then it dawned on him: when those loans went bad and those homeowners walked away, the golf course in the neighborhood was bound to be in trouble.

“We in the golf shop were every bit as much into selling homes as we were into running golf operations,” Gardner said. “I would go to real estate meetings where I would learn about the sections of the development and their price points. Then I had to brief the golf staff so we could answer questions.

“We were dealing with real-estate development companies that would spend $10- to $12 million on a golf course and clubhouse facility with the goal of getting the development 80- to 85 percent sold out,” Gardner said. “Then they got out of golf. They moved on to the next project. Golf was an anchor slowing them down. Writing off $3 million or so (to walk away from a golf course) was not the end of the world to them because they’d made a lot of money selling homes.”

Gardner didn’t realize he had experienced a microcosm of the crash that would set the industry on its heels. But he knew that the roiling in his gut was something that he never wanted to experience again.

“I saw so many courses that were not doing well,” he said. “But we were asking the owners to pay a management fee when they were having trouble paying their bills.”

That’s when Gardner returned to the heartland. He moved to Kansas City and formed Orion. “The properties I wanted to work with were (owned by) cities, counties, colleges and banks,” he said. “I knew that those were owners who needed golf-specific expertise.

“We started in that business, quite frankly, because we knew we were going to get paid. You don’t have to worry about the light bill or your management fee when you deal with banks, municipalities or colleges.”

Banks were plentiful when the real-estate bubble burst. Almost overnight a slew of courses plummeted into receivership with harried bankers having neither the time nor inclination to run them.

“Our pitch was simple,” Gardner said. “We are a one-trick pony. Golf is all we do and we’ve learned how to do it fairly well.”

That wasn’t the company’s only selling point.

“Our business plan was not to be cookie-cutter,” Gardner said. “For years (when I was with a large management company) we would go to national meetings where they would lay out the strategies and procedures nationwide. A lot of us were looking at each other and saying, ‘That’s going to work great over here but not so well over there.’ We came in (with Orion) and said, ‘We’re not going to tie ourselves to any vendor or system. We’re going look at all options and find the best piece that fits your puzzle. We take a personal, custom approach to each property.”

Bankers loved that approach because they are always seen as the bad guys: Simon Legree on a black horse, throwing out a course owner while twirling a waxed mustache. Endearing themselves to local businesses softened the blow for everyone.

“While big national management companies will tell you they’re going to save you X because they have a national contract or a buying agreement, we are going to get you the same deal by doing business locally,” Gardner said. “Quite frankly, that large management company got that purchasing contract because somebody took them to play Pebble Beach or they’re getting rebates. But we make the best buying decisions for you, the client, not because of some rebate or because of some national relationship. With us, you’re getting the best product at the best price.”

Cities and universities loved that message as well, the former because it kept business within the community and the latter because it developed a sense of neighborly goodwill.

“We realized that, philosophically, those institutions are not set up to operate golf courses. If you’re a college administrator, you don’t have the expertise to run a golf operation. We show them that we can do it quicker, better and more efficiently.”

Having lived through the implosion of the market and seen massive layoffs from national companies, Gardner is content to stay close to home. He has six properties in Kansas, Missouri and North Texas. “If it’s within a four-hour drive time, we’ll look at it and see if it’s the right fit,” Gardner said.

It’s a conservative approach in a decidedly niche market. But when you survive the greatest economic downturn in four generations, you do things differently. And you will for the rest of your days.